Yule tools: 5 tips for dodging a holiday credit hangover

All the glitz, glamour, gatherings and good tidings over the holidays can easily make you forget your disposable income has limits.

Who wants to think about overspending when the jingle bells are rocking, the mistletoe is beckoning, peace and goodwill to men abound and the gifts are flowing like sweet, rich hot chocolate?

Still, the gentle voice of reason must kick in if you don’t wish to grapple with Grinch-like credit issues once the holidays hit the wall of reality in January. That’s an issue faced by many; one survey found eight of 10 Americans either overspend over the holidays or deal with a spouse or partner who takes care of that on their behalf.

Fear not. As long as you plan ahead, you should be able to enjoy your fair share of the season’s best offerings without experiencing buyer's remorse once credit card statements make their appearance.

Think about how these smart steps can keep your celebrations merry but manageable.

1. Think of everything. The costs of decorations, food, drinks, travel and fun events can rack up even faster than gift expenses. Remember to factor in tips, hostess gifts, greeting cards, postage and gas. The big picture may reveal you can’t throw the party of the century, hit up that holiday concert and spring for the hottest new electronics for all your nieces and nephews.

2. Divide and conquer. Right now, designate a spending limit for each giftee. Add the total, divide it by three and set aside that amount monthly from now through December. Stash the cash in envelopes labeled with giftee names and amounts, then make like an elf and get shopping. That plan spreads out the financial wallop and wards off overspending like a magic cloak.

5. Manage your credit. Charging gifts is all too easy this time of year, partly because the money doesn’t seem as real when it’s exchanged via plastic. But those costs will come back to haunt you like the Spirit of Christmas Future if you get too carried away with the fun of giving. As a rule, you should avoid charging anything you can’t pay off in one charge cycle if you wish to build the favorable credit score needed to secure the best lending terms.

No one needs to act like the Grinch over the holidays. By thinking ahead and spending intelligently, you can enjoy the spirit of the season and still keep your January merry and bright — without suffering a holiday credit hangover.